March Soybeans closed 2 ½ cents higher ($8.79 ½), July 1 ¾ cents higher ($9.06 ¼) & Nov 1 ¾ cents higher ($9.18 ¼)
March Soybean Meal closed $1.3 lower ($288.5), July $1.3 lower ($299.2) & Dec $0.9 lower ($307.2)
March Soybean Oil closed 44 pts higher ($30.73), July 44 pts higher ($31.48) & Dec 40 pts higher ($32.17)
Soybeans and soybean meal make their session’s highs during the night session prompted by rebounding Chinese Ag markets. Unfortunately the day session was spent backing and filling that nighttime rally. Soybean oil made its session high early in the day session prompted by a rebounding palm oil market but this market too could not sustain the advance. Because of the coronavirus outbreak it is thought that China will have a hard time fulfilling year one of the Phase One agreement. Then again it has been thought that any substantial soybean buying by them would not happen until much later in the year. Soybean meal continues to act as a weight around the soybean market’s neck despite recent reports of better domestic and export demand for US meal. Countering some of that are scattered reports of bird flu popping up in different parts of the world as well as birds dying in China due to a lack of feed due because of certain travel restrictions.
The interior cash soybean market (basis) runs unchanged at most locations. Processors continues to show the best basis levels. The midday posting for soybeans at the Gulf runs unchanged with last night while showing some very slight easing vs. mid-last week. Soybean spreads show fractional improvement out to November. I’m thinking that is a result of today’s modest amounts of short covering. Not much happens with the interior soybean meal basis as it continues to be slack looking. The export basis for meal runs unchanged while holding onto its recent modest gains. Meal spreads run steady to fractionally easier.
As of this writing I’m not looking past a consolidation effort for the soybean market. The meal market’s struggles continue and without the meal market being able to give us some sort upside performance I have to question the soybean market’s ability to sustain a rally. If soybean oil can continue to rally out of the hole it will influence to the soybean market to stay alive but not much more than that. I have to think we’re not out of the woods with the corona virus impacting our ag trade. With that said I can’t be sure that today’s attempts to rally were nothing more than knee-jerk reactions to a modest state of oversold.
Daily Support & Resistance – 2/05
March Soybeans – $8.74 – $8.89
March Soy Meal – $287.0 (?) – $292.0
March Soy Oil – $30.25 – $31.25
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.